Q1 2014 Financial Results...Q1 2014 Financial Highlights Group Amounts Staked increased to EUR 165.9...
Transcript of Q1 2014 Financial Results...Q1 2014 Financial Highlights Group Amounts Staked increased to EUR 165.9...
Q1 2014 Financial Results
Analyst Conference Call
7 May 2014
Agenda
Introduction
Fortuna Lottery Update
Dividend in 2014
2014 Outlook & Summary
Q1 2014 Financial Performance
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Pop. 5.4 million
114k registered users
No. 2 market position (34%)
Retail & Online
Reg. vs offshore market :
EUR 365 mm vs. EUR 100 mm
Pop. 38.2 million
125k registered users
No. 1 market position (37%)
Retail & Online
Reg. vs offshore market :
EUR 200 mm vs. EUR 1.1 bn
Fortuna - Leading regulated CEE
sports betting & lottery operator
Pop. 10.5 million
269k registered users
No. 2 market position (31%)
Retail & Online & Lottery
Reg. vs offshore market :
EUR 780 mm vs. EUR 500 mm
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Q1 2014 Financial Highlights
► Group Amounts Staked increased to EUR 165.9 million +17.5%
► On-line Sports Betting Gross Win EUR increased to EUR 16.2
million +19.2%
► Total EBITDA reached EUR 9.4 million -17.0%, impacted by
customer-friendly football results in January
► No. of registered customers increased by 40%, over half a
million customers in total
Source: Calculated based on FEG consolidated unaudited financial results for Q1 2014 and Company information
FX rates used for translation: average ČNB and National Bank of Poland
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Q1 2014 Financial
Performance
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Financial results Q1 2014
Source: Calculated based on FEG consolidated unaudited financial results for Q1 2014 and Company information
FX rates used for translation: average ČNB and National Bank of Poland
In EUR MM
► Amounts Staked EUR 165.9 mil. +17.5%
► Gross Win EUR 34.1 mil. +1.8%
► Gross Win from on-line exceeded retail for the
first time
► EBITDA EUR 9.4 mil. -17.0%
Amounts Staked
EBITDA Gross Win by Channel
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137,1 162,0
4,2 3,8
0
50
100
150
200
Q1 2013 Q1 2014
Amount Staked lottery Amount Staked sports betting
+17.5%
-7.7%
18.2%
17,8 16,2
13,6 16,2
2,1 1,7
0
10
20
30
40
Q1 2013 Q1 2014
GW retail GW online GW lottery
+1.8%
-16.2%
19.2%
-9.3% 11,3
9,4
0,04 0,02 0
5
10
15
Q1 2013 Q1 2014
EBITDA sports betting EBITDA lottery
-17.0%
-16.9%
-44.6%
Sports betting in regions in Q1 2014
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• More than a half of Amounts Staked generated in the Czech Republic,
growing double digit
• Gross Win up driven by a strong on-line performance
• Retail Gross Win declined
• Less than one third of Group´s Amount Staked, growing double digit
• Gross Win up driven by a strong on-line performance
• Retail Gross Win declined
• Total Amounts Staked growing double digit
• Gross Win up in absolute terms and Gross Win margin up and strong
• While on-line sports betting is growing double digit, retail betting still
represents a significant portion of Gross Win
Source: Calculated based on FEG consolidated unaudited financial results for Q1 2014 and Company information
FX rates used for translation: average ČNB and National Bank of Poland
In EUR MM
Key business opportunities
Regulation
Mobile
access
On-line
gaming
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Regulatory update
Regulated market today Potential changes
• A high 12% tax on amounts
staked (the consumer)
• Restricted advertising and
sponsorship
• Blocking off-shore operators
• Free marketing
• Taxation change to GPT
• On-line gaming & casino
• A 20% GW tax
• On-line gaming & casino
• On-line registration to be
allowed
• Change of taxation in
discussion
• A 6% tax on amounts
staked • On-line gaming & casino
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Fortuna Lottery
Update
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Czech Lottery – Stakes stabilized
and positive EBITDA
► Amounts Stakes stable in local currency exc. FX movements and could potentially to
grow over the FY 2013 figure
► Fortuna is in process to buy a 100% stake in Intralot CZ
► Bank loan with Česká spořitelna is being negotiated, total size of tranche EUR 5.5
million
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In EUR million Q1 2013 Q1 2014 change %
Amounts Staked Lottery 4.1 3.8 (7.7%)
Gross Win Lottery 2.1 1.7 (16.3%)
Revenues Lottery 2.0 1.7 (16.1%)
EBITDA Lottery 0.04 0.02 (44.6%)
Source: Calculated based on FEG consolidated unaudited financial results for Q1 2014 and Company information
FX rates used for translation: average ČNB and National Bank of Poland
In EUR MM
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Dividend in 2014
Dividend Proposal
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Fortuna confirms general dividend policy to pay out
70 – 100% of the consolidated net profit
► The management will propose a gross dividend of EUR 0.22 per share
(EUR 11.44 million in total)
► The dividend payment is subject to the AGM approval on 6 June 2014
► Record date is proposed on 19 June 2014 and payment day 26 June
2014
2014
Summary & Outlook
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2014 Outlook
► Growing market share in scratch card
business
► Intralot deal to be approved
► 2014 Lottery EBITDA in positive figures
► New application, more live contents, new CRM system
► Cooperation with bwin on expanding sport on-line content and offer
► Take advantage of major sports events in 2014 (Winter Olympics, FIFA
World Cup)
► Guidance: 2014 Amount Staked EUR 645 million and 5-10% EBITDA
growth (excluding one-off gain of EUR 2.2 mil. in 2013)
Organic growth
via on-line
expansion
Unlocking
regulatory
barriers
New format of
lottery
business
► Focus on Poland
► Limiting off-shore players
► Gaming & Casino potential
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IR Calendar & Contacts
IR Contacts
Klára Klímová
IR Consultant
e-mail: [email protected]
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Event Date
AGM June 6, 2014
Half Year 2014 Report August 28, 2014
Q3 2014 Interim Report November 6, 2014
www.fortunagroup.eu
Disclaimer
This document has been prepared by Fortuna Entertainment Group N.V:. (the “Company”) solely for use at the Presentation. Any
forward looking statements concerning future economic and financial performance of the Company contained in this Presentation
are based on assumptions and expectations of future development of factors having a material influence on the future economic
and financial performance of the Company. These factors include, but are not limited to, the legal environment, the future
macroeconomic situation, the market competition, the future demand for betting services. The actual development of these
factors, however, may be different. Consequently, the actual future financial performance of the Company could materially differ
from that expressed in any forward looking statements contained in this Presentation.
Although the Company makes every effort to provide accurate information, we cannot accept liability for any misprints or other
errors. In preparation of this document we used certain publicly available data. While the sources we used are generally regarded
as reliable we did not verify their content. Fortuna does not accept any responsibility for using any such information.
This document is provided for information and as a matter of record only. It does not constitute an offer to sell or a solicitation of
an offer to buy or sell securities or other financial instruments in any jurisdictions or any advice or recommendation with respect to
such securities or other financial instruments of the Company.
The distribution of this document in certain jurisdictions may be restricted by law. This document may not be used for, or in
connection with, and does not constitute, any offer to sell, or an invitation to purchase, any securities or other financial
instruments of the Company in any jurisdiction in which such offer or invitation would be unlawful. Persons in possession of this
document are required to inform themselves about and to observe any such restrictions. Any failure to comply with these
restrictions may constitute a violation of the securities laws of any such jurisdiction.
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Appendix
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CEE regulatory environment
Key
legislation
• Lottery Act (No. 202/1990 Coll.) covering numeric
lotteries, gambling games, betting games, casinos, etc.
• Act on Gambling Games covering also betting
games
• New gambling law since 1 January 2010
covering games of chance, betting and
gambling machines
Regulatory
body
• Ministry of Finance and local financial authorities
• Municipalities to regulate shops on their territories
• Ministry of Finance
• Municipalities have to allow operation of betting
shops in their territory
• Ministry of Agriculture has to allow betting on
Slovak horse racing
• Ministry of Finance
Licenses • Licenses are awarded for a maximum period of 10
years • Betting licenses are issued for 5 years
• License for betting organizing issued for 6
years for a specified number of betting shops
Statutory
requirements
• Operator must have its registered office in the Czech
Republic and not be entirely or partly owned by a
foreign entity or individual(s)
• Persons below 18 years of age must not participate in
any betting game
• Certain minimum registered capital required
• Security deposits on a special bank account required
to secure payments of winnings etc.
• An operator must be a Slovak legal entity with
share capital of at least EUR 331,939 owned
by Slovak, EU or OECD member entities
• Security deposit on a bank account required
to secure payments of winnings etc.
• An operator must be a Polish legal entity with
share capital of at least PLN 2 million
• Obligatory collateral (banking or insurance
guarantee, cash deposit or mortgage)
• Betting organizers should obtain consents of
Polish organizers of the competitions, on
which bets are accepted
Taxation/
Fees
• Changes to betting taxation introduced from Jan 2012.
Betting tax on turnover (GW) of 20% and newly applied
corporate income tax of 19%
• Taxation of 6.0 % on Amounts Staked for
fixed-odds betting and 1% for horse racing
betting
• 12% withholding tax on Amounts Staked
(10% under the previous law)
Advertising • Advertising is allowed for licensed operators • Advertising is allowed for licensed operators;
no special rules
• Advertising is restricted; only presentation of
sponsor‘s name and logo is acceptable (only
for licensed operators).
• Advertising inside shop is allowed
Online
betting
• Not specifically regulated; in December 2008 first
licences issued by the MinFin
• Online betting is allowed since 2007, though
not specifically regulated
• Regulated by law adopted in 2011, first
licences issued in January 2012
• Separate registration from retail betting
Prohibited
activities
• Operating and mediation of foreign lotteries and
participation in foreign lotteries, collection of bets for
participation in foreign lotteries
• Operating and mediation of foreign games and
offering of participation on games operated by
a foreign company
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